Yes, GoldieBlox–that gutty little startup with big time legal representation–unilaterally dismissed their claims against Island Def Jam, Sony/ATV and Universal Music Publishing. Yes, get the deep pockets out of there and quickly before they answer the strange declaratory relief action.

This is an interesting twist for a couple of reasons. First of all, Google Shill Listers the Electronic Frontier Foundation have long declared a kind of fatwa against Universal. Given what we know about EFF’s funding, we have to kind of wonder who is ultimately behind this strategy. (See the reporting of Roger Parloff in Fortune (“Google and Facebook’s New Tactic in the Tech Wars“) and Terry Hart’s excellent post on one of the EFF’s cases against Universal that is on appeal, and likely racking up extraordinary legal costs that far exceed the resources of a dancing baby.)

So the fact that Universal is being voluntarily dismissed from any copyright case by this cluster of folks is kind of hard to understand–until you realize that the Durie Tangri gets 100% of the credit for defending their client Google in Google Books that resulted in what passes for “success 2.0”–the creators got royally worked over. One way it seems that Daralyn Durie pulled this off was to attack the ability of the authors to sue as a class, i.e., to stop the ability of workers to protect themselves against the vast riches of a multinational media corporation by banding together.

First they came for the authors, then they come for the musicians

So one way to look at what is emerging as Ms. Durie’s specialty–so clearly and “successfully” demonstrated in the Google Books case–is the strategy of picking off the artists one by one. This is certainly not the first time that wealthy corporate clients in the 1% used a bottomless litigation war chest to crush creators–but it is the first time that so many got crushed all at the same time on a global basis. One would not be surprised that Ms. Durie’s legal strategy in GoldieBlox is to get rid of the deep pocket defendants who could most afford to fight back, and focus on the artists to try to scare them into submission. Her reputation precedes her.

So despite the ghoulish aspect of attacking the Beastie Boys defense of the dying wishes of their brother band member, the strategy is the typical scorched earth that we’ve come to expect from Google. I mean, GoldieBlox.

The dismissal is, at least at the moment, “without prejudice”, meaning that GoldieBlox is free to bring their case against these defendants at another time (subject to any other objections by the defendants).

One must note that the substitution of counsel–particularly this counsel–is worth a passing thought. Why would this have happened this way? Was it the quality of the legal work? Both are well respected law firms in their communities, no doubting that. It seems unlikely that Orrick got fired. So why the abrupt switch?

The mind does wander a bit to speculate when facts cannot easily be understood through logic. One such speculation is that this is the kind of abrupt switch one would expect if a law firm had to withdraw for reasons of conflict of interest–not the only typical reason, surely, but a common one. However, that doesn’t seem likely on the surface because there was no change in the parties prior to Orrick’s departure.

Maybe Orrick just wanted out? Possibly, although it would be rather stunning if they didn’t think they were going to get bad publicity before they ever took the case in the first place. So let’s rule out a withdrawal.

So unless a firm like Orrick blew their conflicts check when they first took on the GoldieBlox case, an outcome to which I assign a very, very low probability as the firm is well run and highly respected, what happened? What changed?

One thing that changed is that the Beasties responded and it was game on from a litigation perspective–at least absent a settlement. That meant that the Orrick legal fees tab was probably going to go vertical, relatively speaking. I can’t believe that Durie’s firm is cheaper than Orrick–perhaps relatively cheaper but no full blown litigation is going to be what you’d call cheap. Particularly not from a start up perspective.

Does Google see Goldiblox as the next big fair use driverless vehicle to advance their anti-creator agenda?

It’s certainly nobody’s business other than the client and the lawyer what the billing relationship is, but given the importance of this case to the ongoing debate in Washington on copyright reform for issues like fair use and orphan works in which Silicon Valley will definitely play a role, this is an important case. Durie has pushed herself into the foreground of this public policy debate with her various high profile cases, so it should not be surprising if the limelight follows her be it welcome or not.

It’s possible that Durie liked this GoldieBlox case just so much that the firm took it on a pro bono basis. That would make sense. But why wouldn’t Orrick have done the same? GoldieBlox would still have to make a choice. Why the sudden change?

We’ll probably never know. However, it’s worth noting something else.

When a third party pays the legal fees for a client, the law firm representing the client should get and probably must get a waiver of conflict of interest from the non-paying client because the payment by the third party creates a moral hazard for the lawyers. There is the distinct possibility of undue influence over the lawyers by the paying third party that strongly suggests the need for ethical walls and other protections for the non-paying client.

The level of descriptive billing detail, for example, raises issues regarding attorney-client privilege if the non-client paying party is to get anything other than a bill for “services rendered” with an amount. A bill sent to a non-client that instead said “Discussed [legal strategy]” might be found to have effected a waiver of the privilege. One wonders whether the issue of a non-client payor could actually be raised in litigation through discovery.

What kind of situation would arise where a party was doing the paying for fees that weren’t their own? Sometimes because it’s a rich uncle paying for an errant niece who got into a jam. Sometimes it’s a venture capital firm paying all or part of the cost for a legal fees to negotiate and paper their investment in a portfolio company. Sometimes it’s because the unrelated third party would like to see a particular outcome in litigation that would create precedent that would benefit their own interests in unrelated matters. Either the unrelated third party has no standing to be included in the case or would like to be in a position to file what some might harshly call sock puppet amicus briefs in the case. It’s then worth it to fund the litigation.

Of course in the latter situation, the third party doing the paying also has to be comfortable with the arrangement and feel that their interests would be well represented. If the non-paying client and the paying third party are both in the same industry with inverted bargaining positions, nothing may need to be said about cooperation. In such a situation, it would be recommended for the law firm to run a conflicts check against the unrelated third party so that the firm did not get into a situation where they were accepting payment for fees from a third party that, for example, they were suing for another client. This would be in addition to obtaining a waiver from the non-paying client.

This factual setting may also be just a little too much risk for some people.

Some people might find this level of risk avoidance over the top, but the kind of people who don’t are usually at old line, white shoe, somewhat crusty law firms. Especially big law firms. The kind of law firms with over 1,000 lawyers and lots of risk avoidance procedures. Big law firms didn’t get to be big law firms by playing too fast and loose with conflicts.

So did the conflict arise because of the new arrival of a third party paying GoldieBlox’s legal fees after the Beasties filed their response to GoldieBlox’s lawsuit?

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Reblogged this on The Trichordist and commented:
If you don’t think Google is aggressively anti-artists… read this.

David

December 19, 2013 at 13:22

Not that I want to find excuses for GoldieBlox/Google, but aren’t GoldieBlox just maintaining their action against the parties who are countersuing them? Island, Sony and Universal did not join the countersuit, so GoldieBlox has no further beef with them.

These inroads being perpetrated by Google are extremely destructive for content creators and for the most part hardly discussed. A deadly combination for the future of creatives and their work. Important read.